Comprehensive or Liability Coverage?

I drive a 1995 Honda Accord that I bought a few months ago. I currently have a policy that includes liability and collision coverage. Is my current coverage adequate or should I also purchase comprehensive coverage? What is the difference between liability, comprehensive, and collision coverage?

Answer

Liability coverage pays for damages and injuries to other drivers for which you are legally responsible. Liability coverage also protects you from lawsuit judgments against you. Most states require that you carry certain levels of liability protection, so this coverage is a must for most drivers. Collision coverage pays for the costs of repairing or replacing your vehicle in the event of a collision. Comprehensive coverage pays for the cost of repairing or replacing your vehicle in the event of non-collision-related disasters, such as theft, fire, vandalism, falling objects, etc. Because you drive an older car that probably has little to no cash value, you might consider dropping comprehensive or collision coverage or both. The insurance company will only reimburse you for damages up to the car’s actual cash value, which might not be worth the cost of coverage for older vehicles.